Literacy rates continue to be strikingly low among women and low caste
population compared to the general population not only in any Indian state, but more so
in the worst performing ones. The present paper offers an explanation of this disparate
development in terms of the hypothesis of elite dominance that discriminates against
women and low-caste people and systematically under-invests in mass education. We
experiment with various indirect economic and political measures of elite dominance.
Results based on the Indian state-level data for the period 1960-92 suggest that higher
share of land held by the top 5% of the population (a) lowers spending on education as
well as total developmental spending and (b) increases total non-developmental spending.
(c) Greater proportion of minority representations (female and low caste members) in the
ruling government however fails to have any perceptible impact on both development
(including education) and non-development spending in our sample. (d) While underinvestment
in education by the elite is supported by the lack of demand for education
from the poorer population (who are often the marginalised people), greater initiatives of
the state to enact land reform legislations enhance the spending on education.